Employee Handbook: Guide or Contract?

A well-structured Employee Handbook can help prevent misunderstandings, guide behavior, and ensure a fair work environment. It is a tool for promoting consistency and alignment among your team.

While an Employee Handbook is a valuable resource, if it is not carefully written, it can inadvertently create contractual obligations for the employer. 

Follow the guide below to ensure your Employee Handbook remains a guide and does not inadvertently transform into a legally binding contract:

Flexibility Acknowledgment
Emphasize the company’s right to modify policies and procedures as needed.

Simple Language
Draft the handbook using clear and simple language, avoiding complex legal terms.

Employee Confirmation
Obtain written acknowledgment from employees, confirming that they have received, read, and understood that the handbook holds no legal obligations between the parties.

Separate Agreement
If the company wishes to establish certain contractual terms, use a separate written agreement distinct from the handbook to clearly outline the terms and conditions.

Avoid Incorporating by Reference
Refrain from referencing specific sections of the handbook in employment contracts or other legal documents. This can help maintain the separation between the handbook and any contractual agreements.

Clear Disclaimers
Clearly state that the handbook is not a contract and that employment is still “at-will.”

An example of how an at-will employment relationship can evolve is when an employee’s status transitions from being terminable ‘at-will’ to being subject to termination ‘for cause.’ This transformation can occur when the employee handbook specifies explicit reasons for termination or outlines warning procedures that will be followed before dismissing the employee.”

Not sure what your Employee Handbook has led you into? Contact us for a No Obligation, Free Consultation. We develop comprehensive and tailored employee handbooks that align with your company’s values, policies, and legal requirements.

Good read: Why is Employee Handbook Important?

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Our services, including Standard Operating Procedures (SOPs), Employee Handbooks, Workflow Flowcharts, Templates & Checklists, Contract Management, File Management, Business Office and Warehouse Relocation Management, and other Business Operations Services, are primarily tailored to small and medium-sized businesses. We cater to various industries, such as retail and wholesale; cafes, restaurants, food trucks, and catering services; hair and nail salons; massage spas; gyms; legal and accounting firms; construction, engineering, plumbing, and electrical services; medical clinics, dental offices, chiropractic practices, and pharmacies; as well as pet retail and services.

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We serve clients from anywhere around the world while being physically located in Denver, Colorado, United States. As business operations and systems consultants, we specialize in procedures and processes, including relocation management for business office and warehouse moves, as well as Global Mobility Services. Our services cater to Small Business Owners, Solopreneurs, and Start-ups in Denver, Aurora, Lakewood, Littleton, Centennial, Lone Tree, Englewood, Highlands Ranch, Castle Pines, Castle Rock, and other Denver Metro areas within Adams, Arapahoe, Broomfield, Denver, Douglas, and Jefferson counties.

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